The Panic of 1907: Lessons Learned from the Market's Perfect Storm | 
| Authors: Robert F. Bruner, Sean D. Carr
Publisher: Wiley
Category: Book
List Price: $29.95
Buy New: $16.53
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Avg. Customer Rating:  24 reviews
Sales Rank: 3423
Media: Hardcover
Number Of Items: 1
Pages: 272
Shipping Weight (lbs): 1.1
Dimensions (in): 9.3 x 6.2 x 1
ISBN: 047015263X
Dewey Decimal Number: 330.9730911
EAN: 9780470152638
ASIN: 047015263X
Publication Date: August 31, 2007
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Shipping: International shipping available
Condition: BRAND NEW
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Product Description
"Before reading The Panic of 1907, the year 1907 seemed like a long time ago and a different world. The authors, however, bring this story alive in a fast-moving book, and the reader sees how events of that time are very relevant for today's financial world. In spite of all of our advances, including a stronger monetary system and modern tools for managing risk, Bruner and Carr help us understand that we are not immune to a future crisis."
-Dwight B. Crane, Baker Foundation Professor, Harvard Business School
"Bruner and Carr provide a thorough, masterly, and highly readable account of the 1907 crisis and its management by the great private banker J. P. Morgan. Congress heeded the lessons of 1907, launching the Federal Reserve System in 1913 to prevent banking panics and foster financial stability. We still have financial problems. But because of 1907 and Morgan, a century later we have a respected central bank as well as greater confidence in our money and our banks than our great-grandparents had in theirs."
-Richard Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets, and Professor of Economics, Stern School of Business, New York University
"A fascinating portrayal of the events and personalities of the crisis and panic of 1907. Lessons learned and parallels to the present have great relevance. Crises and panics are as much a part of our future as our past."
-John Strangfeld, Vice Chairman, Prudential Financial
"Who would have thought that a hundred years after the Panic of 1907 so much remained to be written about it? Bruner and Carr break significant new ground because they are willing to do the heavy lifting of combing through massive archival material to identify and weave together important facts. Their book will be of interest not only to banking theorists and financial historians, but also to business school and economics students, for its rare ability to teach so clearly why and how a panic unfolds."
-Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University, Graduate School of Business
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| Customer Reviews: Read 19 more reviews...
 Learn from the past May 4, 2008
This book gave me huge insight into our nation's current situation as the names may have changed the general issues have not and maybe we can learn from that.
A nice lesson in economics May 2, 2008
This small book does a good job of explaining the Panic that led to the creation of the Federal Reserve Bank. In 1907, JP Morgan was powerful enough, and the world of finance was small enough, that one man could stem the tide. He was 70 years old and had had enough experience to know what to do. His reputation was such that others would take his advice. The story is well told and I was willing to give the authors one more star for their observation that John Maynard Keynes' 1936 recommendation for government counter-cyclical spending during recessions was quickly distorted by politicians to mean government spending in both boom and recession. That led to our present problems with deficits and discredited Keynes. That observation alone convinced me that these authors should be taken seriously. I recommend the story although, as others have pointed out, more information on the role of the gold standard would have been helpful. Morgan was a fascinating figure worth more attention as a cultural icon. It is appropriate that Caleb Carr includes him as a hero in his novels about the same era. A fine little book on economic history.
 Panic of 1907 April 19, 2008
A fascinating book with many parallels to the current crisis. We have no J. P. Morgan today.
Proof of Empirical Elements April 16, 2008
The authors developed a systematic way to look at business cycles or what causes a panic which they explain broadly in the beginning. A historical narrative of 1907 proves to be very entertaining while brilliantly highlighting the seven elements of a panic they preface with before they conclude with a more in depth look at those elements. Highly recommended for those who enjoy economic history and business cycles.
There are still lessons to be learned from this important but too often ignored event April 12, 2008
7 out of 8 found this review helpful
You should never take at face value the claims and declarations of politicians, public relations people, or journalists about the state of the economy. What you are being told is too often self-serving, manipulative, or ignorant. Remember that I said "at face value" because the truth is probably out there, but you will have to dig to find it. History is a good place to dig because in the hands of a careful historian or reporter, the distance of time provides some perspective, the facts are more fully known, and the events can be seen in the context of similar events. The danger is always to judge the past by what happened afterwards as if the people at the time had some knowledge about the path they were heading down with anything more than hope and guesswork.
The banking industry in the United States has suffered from periodic panics throughout its history. Much of this had to do with the fragmented and local nature of the institutions and how a real or imagined crisis can start a small fire in one bank that spreads as depositors and investors rush to try and recover their savings before the bank fails. Much of this has to do with the fact that banks are highly leveraged institutions. That is, they loan out the same dollars multiple times for businesses, to buy homes, and other purchases. We all benefit from this. However, if all depositors want their deposits at the same time, there simply is not enough to go around and the bank will quickly collapse without access to other capital. This ready access to a supply of sufficient capital is called liquidity and in earlier times without a federal bank there was no standard mechanism ready to supply it.
While some disagree, it seems clear to me that our present economic difficulties would be far worse without the Federal Reserve, some bank regulation (we have too much), and some level of deposit insurance. None of this existed in 1907. The San Francisco Earthquake and subsequent fire was so costly that it damaged the global economy. The following year there was a series of events that nearly wrecked the national economy. We don't talk about 1907 much nowadays, but it was this panic that led to the founding of the Federal Reserve and other banking reforms.
This very interesting book by Robert Bruner and Sean Carr takes us through the events of the post earthquake economy that also suffered from the attacks on big corporations by Teddy Roosevelt's Progressive administration. The panic was set off by the disastrous attempt by Otto Heinze to corner the copper market and short squeeze the speculators he just knew were out there, and the tsunami that spread out from the failure of United Copper to banking and trading interests. The relationship of these events to the institutions involved is told in a clear and lively way.
The story of this important period centers on the personal credibility and financial power of one man, J.P. Morgan. He knew what to do and had the personal clout to get others to follow him and do what he told them needed to be done. Another man was also important to this event, but is only touched on in this book. When the crisis was threatening to veer out of control, John D. Rockefeller put up $10 million cash and $40 million more in credit for Morgan to use as needed to stem the tide. Until Morgan and all involved were able to calm the financial seas it was unclear how far the contagion of fear would spread, but it was far from certain that Morgan could pull it off. He worked tirelessly and thank heavens the others had the wisdom to cooperate with him and each other.
I think this is a very interesting and useful book that provides information that can instruct us even in today's very different world, where some underlying principles remain the same but are too often ignored.
Reviewed by Craig Matteson, Ann Arbor, MI
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